Each business day HedgeCo.Net keeps you informed with the top hedge fund industry news, opinion and insight from around the globe. From the latest hedge fund launches, to the impact of regulation, competition, and investor activism - we track the topics and people that make a difference to you.
HedgeCo.net (West Palm Beach) – Man Investments’ seeding fund, RMF Global Emerging Managers, has completed its second incubation deal of the last two months, providing a cornerstone investment of $50 million for Hong Kong’s Minerva Macro Fund.
In July RMF GEM invested $50 million in the flagship product of 5:15 Capital Management, an unrelated fixed income arbitrage manager based in Connecticut.
Minerva is managed by Stanley Ku, who founded the Hong Kong office of hedge fund Fortress Investment Group and most recently managed $750 million for Fortress’ Drawbridge Global Macro Fund. Dorothy Lau, Minerva’s risk and business manager, formerly worked for JP Morgan and Goldman Sachs.
“Stanley Ku’s work at Fortress and Goldman Sachs has made him a very well respected money manager in Asia,” said Hans Hurschler, head of Man Investments’ hedge fund Ventures. “We believe that Minerva has the potential to generate solid, stable returns and that it may attract substantial assets.”
Minerva is a discretionary global macro fund, focused on Asia. It trades only highly liquid instruments such as interest rate or bond futures, foreign exchange forwards and equity index futures or sector ETFs. The entire portfolio is designed to be liquidated in 48 hours.
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West Palm Beach (HedgeCo.net) – In a bizarre hedge fund story sent to me by a reader, an ex JP Morgan Director and ex trader for hedge funds Tudor and Brevan Howard has been traced by his ex wife’s investigators to Singapore where he allegedly has done work for JP Morgan.
According to the Sydney Morning Herald, Simon Sywak, who now lives in a Sydney suburb, was caught on video working in Singapore for the investment bank. Sywak had gotten out of paying maintenance for his children in Britain by saying he was a trainee bus driver and so poor he was forced to live with his mother-in-law.
Sywak’s ex wife, Helen Sywak, has started bankruptcy proceedings in Australia for $250,000 of court costs he failed to pay.
"If he doesn’t pay this amount in the next few weeks, it will bankrupt him and he will have to drop his case suing Westpac Bank for $1.3 million and upwards." Helen said in a letter to the Editor.
Sywak is suing derivatives trader Westpac in Sydney in the Federal Court, arguing that it still owes him a $1.3 million sign-on bonus that it had promised him, however he never started work with the bank because he failed its probity checks, according to the Herald.
His side of the story has yet to surface.
Alex Akesson
Edtior for HedgeCo.Net Email: alex@hedgeco.net
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West Palm Beach (HedgeCo.net) – Intellectual Property Asset Manager, Quest Patent Research Corporation, (QPRC) has entered into an exclusive capital management agreement with a newly formed Delaware limited liability company, PSI Capital Management, LLC. (PSI) to launch a new patent asset hedge fund, Patent Strategies I Fund, LP.
Domiciled in New York, with $250,000 as minimum investment, the fund has a 2% management fee, a 2 year lockup period and JP Morgan Chase as custodian. The launch comes with a new website.
Jon Scahill, QPRC President, and Joby A. Hughes, minority PSI owner, will serve as the Principals of PSI. Under the terms of the agreement, QPRC, through PSI, will be solely responsible for researching, selecting and monitoring investments and deciding on when and how much to invest or withdraw from a particular investment. The new fund has an investment strategy of acquiring interests in patent assets and generating revenues from licensing activities relating to patent assets.
"QPRC’s management provides a unique resource for taking on intellectual property assets at any stage in their development." Hughes said, "As a market leader in the development of early stage intellectual property, QPRC is already in a position to manage and commercialize those types of assets. PSI provides QPRC additional financial resources to develop a wider array of assets to their fullest potential. It is exciting and an honor to be included in this next phase for QPRC.”
“Collaboration on this initiative with an individual of such caliber and performance as Hughes is a tremendous value." Scahill said, "This new partnership will further our ability to provide shareholders participation in a dynamic asset class, uncorrelated to the broader market.”
Alex Akesson
Editor for HedgeCo.Net Email: alex@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
Dallas Morning News – To bank employees monitoring the hedge fund’s collapse, the e-mailed instructions were emphatic.
"No securities, or cash, FOR ANY REASON are allowed to be sent out from JP Morgan."
At issue that morning last November were the accounts of Parkcentral Global Hub Ltd., a Bermuda-chartered fund run from Plano and Dallas by the Perot family, one of the richest families in the world. J.P. Morgan Chase & Co. was the fund’s banker and a trading partner.
Reuters – Japanese corporate pension funds have been cutting their domestic stock holdings and buying more domestic bonds to avoid risky bets amid financial turmoil, a JP Morgan Asset Management survey showed on Tuesday.
Pension funds on average lost about 18.4 percent on their investments in the financial year that ended in March, the survey of 75 funds found.
Reuters – India Church Pension Fund has invested in Future Group backed Indivision India, Advantage Partners and IDG Accel China.
The $8 billion Church Pension Fund based in New York City has roped in Eric Mason(ex-Carlyle Group), to open a new Hong Kong office, its first in Asia, reports Dow Jones.
Mason is a former JP Morgan banker and most recently headed Carlyle Group’s Asian leveraged finance team(set-up in 2007 but disbanded in November 2008 after the credit crunch hampered its ability to raise funds). He will look after all asset classes including private equity, real estate and hedge fund investments in the continent, the report said.
New York (HedgeCo.Net) – Hedge fund assets, which were once estimated to reach almost $3 trillion, finished the year at around $1.8 trillion, according to research conducted by London-based HedgeFund Intelligence.
The report contends the fall in assets happened almost entirely in the second half of 2008, as markets took a beating and many hedge funds were forced to close shop. In addition, hedge fund firms that manage $1 billion or more fell from 395 in mid-2008 to 311 at year’s end. Also contributing to the fall was the fact that new fund launches didn’t come close to filling the void left by failed funds. While just 55 new funds were launched last year in the United States with assets of $50 million or more, 200 hedge funds were shut down or liquidated.
Hedge funds as a whole posted their worst year to date in 2008, with the average fund losing about 19 percent, according to data compiled by Chicago-based Hedge Fund Research. The firm also reported hedge funds are already experiencing a better year, with the average fund gaining 0.39 percent in January and falling a mere 0.51 in February, though still outperforming the stock market.
HedgeFund Intelligence predicts that assets may drop another 20 percent or more in the coming months, before leveling off sometime during this year.
According to their data, Bridgewater Associates is the largest hedge fund based on assets under management, with $38.6 billion. Coming in second, JP Morgan manages $32.9 billion, while John Paulson’s Paulson & Co. slid into third place with $29 billion in assets under management.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com
Bloomberg.com: UK & Ireland – Citadel Investment Group LLC, the $19 billion hedge-fund firm run by Kenneth Griffin, hired three senior executives from Lehman Brothers Holdings Inc. to boost its fixed-income team.
Timothy Bryan Wilkinson, former head of fixed income proprietary trading at Lehman Brothers, will work on the same business at Citadel’s proprietary trading group along with John Alexander Goodridge, the company said in an e-mailed statement today. Alex Maddox, 38, formerly head of European mortgage-bond trading, will become Citadel’s head of securitized products in Europe. The team will report to Patrik Edsparr, Citadel’s global head of fixed income and European chief executive officer.
Banks and hedge funds are hiring Lehman executives as the bankrupt U.S. securities firm cuts 750 jobs in its European fixed income division after talks to find a buyer failed.
New York (HedgeCo.Net) – The international man hunt for Sam Israel came to an end yesterday when the hedge fund fraudster turned himself over to authorities.
Israel turned himself into the Southwick, Mass., police station around 9:30 a.m., said Suzanne Anderson, Police Chief Assistant. The police station is about 95 miles away from the Ayer, Massachusetts federal prison that Israel was supposed to report to on June 9th to start serving his 20-year sentence.
After Israel failed to report, his SUV was found abandoned on the banks of the Hudson River, with the words “Suicide is Painless” scrawled through the dust on the window. Officials were immediately reluctant to believe the man who bilked $400 million worth of cash from trusting investors through his hedge fund scheme.
The 48-year old swindler once ran the Bayou hedge funds and covered up losses through doctored performance reports and by setting up a fake auditing firm. He also reaped millions from trades conducted through his securities firm.
Israel’s girlfriend, Debra Ryan, admitted to aiding Israel’s escape. She drove her car alongside Israel’s SUV to the Hudson, where he then hopped in with her and returned to their home.
It is rumored that Israel turned himself in because of ailing health problems, sort of a bummer when you’re a fugitive and your face is plastered on WANTED signs all over the country.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com
Bloomberg – Bear Stearns Cos. didn’t investigate the financial health of a hedge-fund client that later collapsed because its claim of an annual 20 percent return on investment “made perfect sense,” a former executive at the firm said.
Bear Stearns was sued in 2001 by a bankruptcy trustee on behalf of creditors of the now-defunct Manhattan Investment Fund Ltd. U.S. Trustee Helen Gredd alleged New York-based Bear Stearns was liable in part for $400 million in investor losses because it didn’t properly inspect the fund’s books, according to a complaint originally filed in a Manhattan bankruptcy court.
A senior Bear Stearns executive learned in 1998 that the fund was claiming a 20 percent return when the securities firm’s records showed a $190 million loss, the trustee said in court papers. The executive, Fred Schilling, was head of prime brokerage sales in 1998 when an investor in the hedge fund praised its returns to him at a cocktail party, he said.
“With the information I had, that Ernst & Young was a third-party administrator, and there were other prime brokers involved, it made perfect sense,” Schilling, referring to the New York-based auditor, testified today during a trial of the case in Manhattan federal court. The executive said he learned an affiliate of the accounting firm aggregated losses and gains from other parties to arrive at the final return rate.
Under U.S. bankruptcy law, if Gredd can prove the securities firm failed to diligently investigate the fund, she can recover around $141 million on behalf of creditors.
Bear Stearns spokeswoman Elizabeth Ventura declined to comment.
India Daily- The Bear Stearns Hedge Fund Managers are getting indicted for starting the credit crisis. According to media sources, Federal prosecutors are preparing to file criminal charges against managers of two Bear Stearns Cos. hedge funds whose collapse helped mark the start of the credit crisis. The U.S. Attorney’s office in Brooklyn is in the process of completing interviews of witnesses and other key people in the case this week, and has indicated to lawyers with interest in the case that indictments could be imminent.
The former Bear Stearns managers, Ralph Cioffi and Matthew Tannin, managed two high-profile bond portfolios for the securities firm’s asset-management unit. Bo doubt they aere one of the helpers in triggering the crisis. But are they really the root cause of the credit crisis?
Seattle Times- Lehman Brothers on Tuesday denied that it was forced to tap the Federal Reserve’s discount window to stave off cash problems, and maintains that its books remain liquid.
The nation’s fourth-biggest investment bank was battered Tuesday amid reports it needs to raise up to $4 billion of capital because of steep losses linked to the ongoing credit crisis. The securities firm is set to report its first loss later this month since splitting off from American Express in 1994.
Shares of the company tumbled 15 percent Tuesday after market rumors surfaced that it was forced to borrow from the Federal Reserve’s discount window to maintain operations.
